USDA Rural Refinance: No Appraisal No Credit Report

by Ask Kate

Ask Kate about the USDA rural home loan refinance with no appraisal, no credit report, and no debt-to-income ratio requirements: If you are a homeowner with a USDA guaranteed mortgage, you may be able to refinance for a lower interest rate if you live in one of the 35 states included in the pilot program.


What is the USDA Rural Home Loan Refinance Program

USDA Rural Home Loan  Refinance with No Appraisal, No Credit Report, and No Debt-to-Income Ratios
It's heart breaking to home buyers to make the purchase of their life, their dream home, only to find it falls in value.

But now there is good news for middle class homeowners currently financed with a USDA guaranteed mortgage.

No appraisal, no credit report, and no debt-to-income ratio calculations are required to refinance the existing home loan. Yes, even if the home is underwater!

Beginning as a pilot program in 2012 for refinancing USDA home loans, 19 states were eligible to participate. In early 2013, 14 additional states and Puerto Rico were added with the intent to contribute to the housing recovery.
Need 100% financing? See how you can buy a home with no down payment at USDA Rural Home Loans: Zero Down Payment Mortgage.

USDA Guaranteed Rural Home Loan Refinance: Features and Benefits

  • No equity required and being underwater is okay, too.

  • No appraisal required.

  • No credit report required.

  • No property inspection required.

  • No debt-to-income ratios calculated.

  • 30 year fixed rates - Zero hidden rate adjustments.

  • Your choice of participating lending institutions.

  • Additional borrowers may be added while refinancing.

  • Refi closing costs can be rolled into the new loan amount.

USDA Rural Refinance Program: Requirements and Restrictions

  • Only borrowers of Guaranteed (and Direct) mortgages are eligible to apply.

  • Only deceased borrowers may be removed in the refinance.

  • No cash out.

  • Income eligibility limits must be met.

  • Income¬†must be documented.

  • Current interest rate must decrease at least 1% in refinance.

  • The 2% annual fee will not be waived.

  • Lender overlays may apply*.
*If your lender begins adding to the USDA Rural Home Loan guidelines and requirements, go here to learn how to strategize lender overlays.

33 Participating States and the Commonwealth of Puerto Rico

Original states approved to participate in the USDA's pilot refinance program of 2012...
  • Alabama

  • Arizona

  • California

  • Florida

  • Georgia

  • Illinois

  • Indiana

  • Kentucky

  • Michigan

  • Mississippi

  • Nevada

  • New Jersey

  • New Mexico

  • North Carolina

  • Ohio

  • Oregon

  • Rhode Island

  • South Carolina

  • Tennessee
On January 31, 2013, the program expanded to additionally include...
  • Alaska

  • Arkansas

  • Colorado

  • Idaho

  • Kansas

  • Missouri

  • Montana

  • North Dakota

  • Oklahoma

  • South Dakota

  • Texas, Utah

  • Washington

  • West Virginia

  • Wisconsin

  • Commonwealth of Puerto Rico

USDA Rural Home Loan Refi: Eligibility Guidelines

Just as the HARP underwater refinance program operates with eligibility guidelines, so does the USDA Guaranteed Rural Home Loan Refinance. Here are the musts to be eligible to apply...
  • Homeowner must be financed with a Guaranteed (or Direct) USDA mortgage.

  • Must be the principal residence of the homeowner.

  • Property must be in the original and/or currently designated rural area.

  • Current and the most recent 12 consecutive mortgage payments must have been paid on time.

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